NMP - February 2018 - 30

Rising Rates!

30

FEBRUARY 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

By Andy W. Harris, CRMS

ast month, I talked about the acquisition and
mergers I anticipate we'll see somewhat heavily as
we move further into 2018. I also believe we'll see
some retraction and layoffs with rates rising and
also some regrets with recent new branches added
to certain markets that cannot sustain the lack of
demand during a saturated market. The market will balance out
now that rates are rising, but to use 2016 and 2017 projection
into 2018 planning, I believe is a poor decision specifically when
it comes to adding overhead. Optimism and hustling is always a
good thing and growth possible, but not "added" fixed overhead
in a volatile industry. The cloud offers production without
overhead.
So, with that said, we'll see what happens. According to
Freddie Mac mortgage rate data, as of Feb. 1, 2018 we're at the
highest rate levels we've seen in the last four years. If you all
recall, this was January of 2014 and through the entire first
quarter and into second quarter where rates held around these
levels. The first quarter of 2014 came off the tail of 2013, which
was a pretty good year for mortgage rates. Many companies
expanded as a result and then retracted in 2014 due to the
losses they were faced with. At that time, I recall interviewing
several mortgage companies and the majority reflected a loss
that first quarter and most the first half of the year.
This certainly seems to show that history can repeat itself. Of
course, many still will show profits, gains and grow market
share strategically. However, I do believe the margin restrictions
and technology will continue to demand less margin in the rate
sheet. Consumers have too much access to data and the new
buyers are smarter than those of the past. Fixed overhead must
be controlled in a rising rate environment, with purchase
transactions primarily at play. We may see some cash-out
refinance transactions to pay off the now non-deductible second
mortgages, but should be an interesting purchase year and

L

competitive! Never a dull moment in the mortgage industry.
Are you an originator? Send your stories! To have your topics
considered in future editions, please e-mail me with
"OrigiNation" in the Subject Line at
AHarris@VantageMortgageGroup.com. These can be confidential
or your name and company can be referenced if you wish. You
can also join the Facebook Group by searching for "OrigiNation."

Andy W. Harris, CRMS is President and Owner of Lake
Oswego, Ore.-based Vantage Mortgage Group Inc. and
Past President of the Oregon Association of Mortgage
Professionals. He may be reached by phone at (877) 4960431, e-mail AHarris@VantageMortgageGroup.com or
visit VantageMortgageGroup.com.


http://www.VantageMortgageGroup.com

Table of Contents for the Digital Edition of NMP - February 2018

Contents
NMP - February 2018 - Cover1
NMP - February 2018 - Cover2
NMP - February 2018 - 1
NMP - February 2018 - Contents
NMP - February 2018 - 3
NMP - February 2018 - 4
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NMP - February 2018 - Cover3
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